Pick N Pay in Franchisee Agreement With BP, to Retail Fuel in South Africa

Retail store operator Pick N Pay has entered into an agreement with BP to retail fuel in addition to operating convenience stores at petrol stations in South Africa, according to PetrolWorld.

Under the agreement, BP will act as the landowner and fuel wholesaler, while Pick N Pay will function as a franchisee. The two parties had signed a memorandum of understanding in July 2008 and are expected to open two initial locations in Cape Town by 2008-end. Countrywide roll out reportedly depends on the success of the business model.

The new locations will be named Pick N Pay Express and will replace existing BP Express stores. These locations will stock over 1,500 lines and will be open for business 24 hours a day, seven days a week, according to the news source.

Diesel will reportedly be discounted at the stores, while petrol is expected to be sold at prevailing prices as the South African government regulates pricing.

Nick Badminton, CEO of Pick n Pay, said: “Our chairman, Raymond Ackerman, has for decades promoted the idea of selling discounted fuel and while we by law cannot sell cheaper petrol yet, we will be allowed to sell cheaper diesel. In these times of skyrocketing fuel prices, we believe that motorists will leap at the opportunity to buy discounted diesel.”